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Archive for the ‘Home Loan’ Category

Home Loan Tip #1 Pay Your Bills
It is very important that you always pay your bills on time and never miss a payment. When you have this type of history paying bills your mortgage lender will believe you will be just as responsible with your home loan. If you want to be approved for a home loan, be sure you are current on all your payments and have been making them regularly for some time before you apply for a home loan.

Home Loan Tip #2 Employment History
In general, when an individual has been employed in the same job for at least two years, or at least the same type of job for that amount of time, a home loan approval is more likely. So, if you have been in your same job for a year and a half and are considering quitting or changing jobs, but are also looking at buying a house, wait until your home loan is approved before you make any changes. Once you have your home loan, you can make any changes.

Home Loan Tip #3 Pay Debt Down
Your debt to income ratio is considered when you apply for a home loan. If you really want to be approved for a home loan then you need to make sure you pay off as many debts as possible in order to look favorable to the home loan lenders. A home loan is approved for individuals who have a low debt to income ratio.

Home Loan Tip #4 Savings
Before applying for a home loan, make sure you have saved at least 20% of the down payment and also have enough money to cover several months of your home loan payment. When you have enough money in savings to cover you if you experience financial difficulty one month or even two or three then the lender will be more likely to approve your home loan.

Article Source: http://www.eArticlesOnline.com

Here are some simple tips to help you negotiate a good home loan interest rate.

1) First finalize your property, then choose your lender

A common mistake many people make is to take a pre-approved loan before finalizing property. You don’t need to take a pre-approved loan to know how much you are eligible for. (Simply use our home loan eligibility calculator if that’s all you want to know). Besides, imagine falling in love with a property and then discovering that the lender you chose will not fund that property due to some legal/document issues.

You are better off finalizing your property first and then applying for a home loan. Banks are known to reserve the best deals for immediate disbursement cases as there are targets to be achieved.

2) Go window-shopping, then bargain and then bargain some more.

Not only from the perspective of interest rates, but also the eligibility amount it is advisable that you shop around and play one provider against another. A home loan is large purchase decision; 0.2% knocked off your interest rate over a 20 year home loan can typically save you half a lakh! Apart from interest rates, also look out for various fees and charges – processing fees, pre-payment charges, legal fees, valuation fees and other hidden costs. So haggling is worth the trouble. Summon up all your bargaining powers and let banks compete for your business! Enjoy the journey.

3) Teaser rates may be good but understand them before you sign

The State Bank of India Home Loan scheme (popularly called the 8% scheme) is very good scheme but surely costs much more than 8% except in the first year. The success of this scheme has ensured that other banks also offer what bankers call ‘teaser rate schemes a low initial rate but a higher rate after the first couple of years. Please evaluate the impact on overall cost of such rate changes over the entire loan tenure (typically 20 years). Our interest rate comparison tool gives you the average rate as well as the initial rate to help you understand them better.

4) Fixed or Floating – be vigilant

In some cases, a “fixed rate loan” may remain fixed only for a certain period of time, as the bank may have the right to arbitrarily change even the so called ‘fixed rate’. Do your due diligence before signing anywhere. Likewise, if you choose a floating rate loan, check if the rates of your chosen lender have actually floated down in the years when interest rates were dropping like a stone. There are a lot of not-so-transparent banks in the market who float the rate up when the industry rates are going up but fail to float the rate down when the industry rates go down. To know whether the bank you are talking to offers ‘transparent floating rates’, ask for the bank’s track record – especially in the falling interest rate regime of 2009 or of 2002-2003. Past behaviour is a fair indicator of how the bank will behave in future – whether it will pass on the benefit to you if and when the interest rates start moving down.

Article Source : http://loanmum.com

NEW DELHI: With most banks set to increase lending and deposit rates, it’s time to rework your monthly budget.

A day after housing finance firm HDFC set the ball rolling by announcing a 50-75 basis points increase in lending rates, ICICI Bank — the country’s second largest lender — hiked its lending and deposit rates.

Effective Monday, the private sector lender will increase its benchmark prime lending rate, which also affects floating rate home loans taken before July, by 50 basis points (one basis point is one-hundredth of a percentage point). Deposits with ICICI Bank will now earn 25-50 basis points more.

For home loans, the increase in lending rates roughly translates to the equated monthly instalment (EMI) going up by around Rs 50 per lakh. So, for someone who has borrowed Rs 30 lakh for 20 years, a 50 basis-point increase will push up his EMI by around Rs 1,500.

A shift to another bank is not an option because most of them look set to follow the trend.

On Monday, State Bank of India — the country’s largest lender — will take a call on hiking rates. Axis Bank, another private sector lender, too, is expected to review its rates next week.

An increase in rates appears to be a certainty, it is the extent of the hike that most banks have to decide on.

Of course, those on teaser rate schemes will see their EMIs protected for the tenure that interest rates were fixed. Even ICICI Bank’s increase is not going to affect the fixed rate borrowers.

The higher EMI burden is the result of a series of hikes in policy rates announced by the Reserve Bank of India this year as part of its efforts to tame inflation. As a result, the cost of funds for banks has gone up — both in the deposit market as well as in the money market.

What has added to the pressure is the low availability of cash in the system. With growth in bank deposits unable to keep pace with the rise in flow of loans, liquidity has stayed tight prompting banks to tap RBI for funds. In the coming weeks, liquidity crunch can intensify. Quarterly advance tax payments for large taxpayers is due by December 15, and this, along with quarter-end demand for loans, will put further pressure on banks.

“If the liquidity situation remains the way it is, probably we will have to take a call on it (interest rates),” said Axis Bank Managing Director and CEO Shikha Sharma.

A senior SBI executive said, the bank is reviewing interest rates and its asset-liability committee will take the final decision on Monday.

“We will decide at an appropriate time. It is a dynamic market and we need to keep reviewing it,” added KR Kamath, chairman and MD of Punjab National Bank .

A handful of players, such as Union Bank of India , however, said having recently increased lending and deposit rates, they would prefer to wait for a while.

But most bankers were unanimous that in the coming days, deposits will have to be incentivised by way of higher rates. And, a higher cost of deposits for banks automatically translates into higher lending rates.

Article Source : http://economictimes.indiatimes.com

Compared to other homeowners, Californians pay one of the highest premiums in the country for their warm, sunny climate. According to the National Association of Realtors, the median price for a single-family home in California topped out at an eye-popping $542,000 in fourth-quarter 2005. While finding the cheapest home loan rate
is important wherever you live, prices like these underscore the importance of doing your mortgage homework if you live in California.

According to “Looking for the Best Mortgage”, an article published by the Federal Reserve, getting a good rate on your California mortgage is basically a three-step process. The Fed’s strategy, which it calls “Shop, Compare and Negotiate”, says a mortgage is essentially a product like a car. Just like the price of a new Caddy, the price and terms for a home loan are often negotiable. So, says the Fed, it pays to shop, compare and negotiate.

The first step in the process — shopping for the best home purchase loan, home equity loan or refinance loan — is easier than ever. That’s because of the dramatic increase in the number and popularity of online lenders. Nationally recognized lenders like Home 123 or Ameriquest now offer a wide variety of mortgage products in many states, including California. Besides offering mortgage products that combine convenience and flexibility, online lenders are also available 24/7 to give you a free mortgage quote — something that can’t be said of traditional brick-and-mortar lenders like banks or credit unions.

Shopping around for your California mortgage is just the first step. After that, you’ll want to compare the offers you’ve received. Make a checklist that contains all the key information about rates, points, fees, the down payment, and the cost of private mortgage insurance. Set up the worksheet in a spreadsheet program like Microsoft Excel and give each lender a column of its own. That way it’s easy to compare lenders — and the bottom line — side-by-side.

Finally, says the Federal Reserve, don’t assume a lender’s offer is the last word in your search for the best California mortgage. That’s because mortgage lenders frequently offer different terms and rates to different customers, even if those customers are equally qualified for a mortgage loan. It pays to negotiate, so now is the time to show a prospective lender that you’re a savvy consumer shopping for the best possible deal. Don’t be afraid to ask for lower fees, a lower rate or fewer points!

In conclusion, when buying a home or negotiating a home equity loan or refinance loan, don’t forget to shop around, compare offers and flex your negotiating muscles. That way you’ll get the cheapest home loan deal on your California mortgage!

Article Source : http://www.articlealley.com/

Many people are now investing in properties and are buying new home. The cheap and easy SBI housing loans makes it possible for them to get low SBI home loan interest rate, which enables them to invest in properties. People can use the SBI home loan EMI calculator and then apply for the SBI housing loans, which may be available to them.

SBI has introduced very low SBI home loan interest rate, which can easily be paid by the customer. The loan applicant can apply for different types of SBI housing loans and choose the SBI home loan interest rate that is suitable for him. He can take the help of the SBI home loan EMI calculator that can help him determine the percentage of loan he can apply for.

The SBI home loan EMI calculator is the perfect way to know what kind of SBI housing loans you should apply for. It also allows the loan applicant to calculate the SBI home loan interest rate and know the amount of EMI he would have to pay on the loan. You can just fill in your capital amount and saving, which would help you get the loan amount you can apply for. They can also mention whether they want to apply for fixed SBI home loan interest rate or for the one with floating interest rate for SBI housing loans. This can help you arrive at the loan amount that may be granted to you. Once you get the loan amount through the SBI home loan EMI calculator, you can proceed ahead and fill in the SBI housing loans application.

There are different types of schemes available on SBI housing loans. One can get the information about them online and thus make their decision. This is one of the best ways to know about the home loans offered by the bank. You can use the SBI home loan EMI calculator as well, which is available on the site and calculate your loan amount as well.

People now have the ease to download and fill the SBI housing loans application online. They can visit sbi-home-loan.com to do the same. The site has information about the SBI home loan interest rate and about the ongoing schemes and offers as well. Thus, you can know everything and anything about home loans and apply for the same.

Article Source : http://www.articlealley.com/

Axis Bank (Power Home) Home Loan Rates.

Purpose of Axis Bank Home Loan (Power Home) :

• Purchase of a plot of land and construction of house.
• Building a house on plot of land already owned.
• Purchase of a new house/ flat.
• Purchase of old house/ flat.
• Extend/ Renovate/ Repair of a house or flat already owned by self
• Take over of existing housing loan

Loan Eligibility:

For salaried people:

• Any individual who is in permanent service in Government or private companies can apply for axis bank home loan.
• The applicant must meet the very terms & conditions and should be above 24 years of age at the time of loan formality and up to the age of 60 Years, whichever is earlier at the time of loan maturity.

Professionals:

• Professionals like doctors, engineers, dentists, architects, chartered accountants, company secretary, etc can apply for axis bank home loan.
• The applicant must meet the very terms & conditions and should be above 24 years of age at the time of loan formality and up to the age of 60 Years or less, whichever is earlier at the time of loan maturity.

Self Employed Individuals:

• Any individual filing Income Tax returns can apply for axis bank home loan.
• The applicant must meet the very terms & conditions and should be above 24 years of age at the time of loan formality and up to the age of 60 Years or less, whichever is earlier at the time of loan maturity.

Limits on home loan:

• Minimum loan amount- Rs 1 lac.
• Maximum loan amount- Rs 50 lacs.

Margin:

• 15% in case of Home loans
• 25% in case of improvement or renovation loans.

Axis Bank Home Loan Interest rate as of Oct 2010:

• Floating Rate: 8.75% for upto 30 lacs & 9.25% for above 30 lacs.
• Fixed Rate: 14% (Irrespective of the loan amount).

Switching Interest Rates:

• Switching from the floating rate to the fixed rate and vice versa is allowable. If a fixed rate applicant wants to reschedule the loan to a lower interest rate, the same is also allowable.

Article Source :http://www.sooperarticles.com/

Dream of having a home is common to humans. The people of Australia are no exception. It must be mentioned that Australia is a wonderful country which any one is sure to choose for living. Naturally demand of the people to build up a house or to buy a house of their own is great. Parallel to this, the price of the real estates has gone up with passage of time. Nevertheless, home loans in Australia are there to fulfill the long-cherished dreams of the Australian people.

Home loans in Australia have several colors. The financial institutions and banks which provide finance for the home loans in Australia shape and reshape their programs with interval of time. This is why terms and conditions related to the home loans in Australia are found to be changed time to time. This is again a reason for which the people of Australia should be careful in learning the latest development in the world of home loans in Australia. It is possible for them to learn a lot from the specific websites on the internet and they should at least be aware of the current trends.

Financial institutions and banking organizations have natural limitation of their own. They remain busy with their own area of business. The websites which they provide on the internet contain only their products. One can hardly chance to compare with others which are available in the market. Of course, there will be careful exaggerations which may be close to what are called as misleading information. One must keep this in mind and proceed with patience.

Moreover, home loans involve multiple factors and there are different kinds of products. The ideal approach is to customize the offering proposal. Side by side, one should learn if there are secret agenda which may create serious problems in future. Once the borrower is trapped simply because of his simplicity, he will face great disadvantages. The borrower must be clear to himself about his practical necessity and he must not hesitate to ask any question whatever would arise in his mind.

It is good for the borrower to contact the local broker or broker of any particular area. The broker can advise rightly as he possesses the required knowledge of the area and of the home loans in Australia business prevalent there.

Article Source : http://www.articlesbase.com/

HDFC (Housing Development Finance Corporation), India’s largest mortgage financier, today increased its retail prime lending rate (PLR) by 50 basis points (bps) to 14.25 %. This is the first time HDFC is increasing its PLR in two years.

According to a senior HDFC official, 75 % of the mortgage financier’s lending is done at floating rates.

“Our cost of funds has gone up and we have to maintain spreads and profitability. Our rate hike comes after many banks active in home lending have raised rates. The increase is unlikely to impact the pace of home loan growth,” the official said.

For HDFC, the spread on loans over the cost of borrowings for the quarter ended June stood at 2.34 % compared to 2.31 % for the year ended March 31, the executive added.

Since HDFC home loan follows a three month reset cycle for its floating rate loans, the change in PLR will impact all the existing customers over the next three month period depending on their date of first disbursement.

Almost all public sector banks have increased their benchmark prime lending rate, which has pushed up home loan rates.

“Our cost of funds has gone up and we have to maintain spreads and profitability. Our rate hike comes after many banks active in home lending have raised rates. The increase is unlikely to impact the pace of home loan growth,” the official said.

HDFC was locked into a pitched battle with the country’s largest lender State Bank of India (SBI) in home loan rates. While most banks have withdrawn fixed-cum-floating rate schemes, the two lenders have persisted with the teaser rates. SBI home loan scheme was valid till 31 August, while HDFC’s scheme is valid till March 2011.

Article Source: http://www.articlesbase.com/

A home loan is probably is the biggest ever loan for most people. It often amounts to hundreds of thousands of dollars. Not surprisingly, qualifying for a home loan doesn’t come easily. Before agreeing to lend $300,000 for a new home buyer, the mortgage lender needs proof that the borrower can keep up with mortgage repayment.

The following are some lending criteria set by mortgage lenders for their prospective borrowers.

Borrower’s Income is a Major Lending Criterion

Obviously, the best way to service a loan is to have regular income. Generally, that means having a permanent and steady job. The mortgage provider will often need to see the borrower’s employment history with the same employer for at least 12 months. When applying for a home loan, the three most recent pay slips, two years of tax returns and proof of continued employment from the current employer in writing will be required.

A word of caution here – if there are plans to switch jobs, wait until a mortgage has been secured first. Changing jobs while trying to qualify for a home loan can affect the chances of getting it.

Ability to Make Home Loan Repayments

In addition to a future mortgage account holder’s stream of income, his ability to make loan repayments also matters to the mortgage company. Things looked into include living expenses, other loan repayments and the number of children or dependents the borrower has. If there are many other financial commitments, the size of the loan may need to be reduced.

Home Buyers’ Assets Count When Qualifying for Home Loans

To gauge how good a home buyer is with money management, the home loan provider also wants to know if he has other assets such as another property, vehicles, equipment, collectibles or a share portfolio.

Home Buyers’ Liabilities Can Affect Chances of Securing Mortgages

A prospective borrower’s liabilities or debts such as car loans, personal loans and credit card bills are things that mortgage lenders check thoroughly too. The lenders are particularly concerned with the maximum credit limit their borrowers’ credit cards have. The higher the limit, the more likely that the borrower will owe the credit card provider a lot of money.

As a result, the borrower may not be able to service his home loan properly as he needs to pay off his credit card bills as well. To improve the chances of qualifying for a home loan, close high limit credit card accounts that are rarely used.

Credit History Matters to Mortgage Providers

An impaired credit history will work against the borrower. If he has not been able to repay his other debts properly or is constantly making late repayments, his home loan application may not be successful.

That said, not having any credit history is not a good thing either. Many mortgage providers are suspicious of people with no credit history and wonder if these borrowers can actually pay back the loan regularly as there are no records of them ever having done it successfully. So it may be better to have huge debts that have been paid off than not having any previous debts at all when trying to secure a home mortgage.

Home Loan Lenders Consider Savings History Too

Although raising a home deposit worth at least 10% of the property price is a good start, having a good savings history counts as well. A prospective borrower who can show that he has genuine savings records over the past few months rather than miraculously accumulating a big sum of money within a short month will be seen more favorably by home loan providers. Bank accounts with regular deposits, fixed term deposits for at least six months and a share portfolio are proof of savings that mortgage lenders want to see.

Several lending criteria apply when qualifying or applying for a home loan. In general, the mortgage lender will consider the borrower’s income, ability to repay his loan, assets, liabilities, credit history, size of home deposit and savings history.

Article Source : http://www.suite101.com/